Correlation Between UnitedHealth Group and Cardinal Health,

Can any of the company-specific risk be diversified away by investing in both UnitedHealth Group and Cardinal Health, at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UnitedHealth Group and Cardinal Health, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UnitedHealth Group Incorporated and Cardinal Health,, you can compare the effects of market volatilities on UnitedHealth Group and Cardinal Health, and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UnitedHealth Group with a short position of Cardinal Health,. Check out your portfolio center. Please also check ongoing floating volatility patterns of UnitedHealth Group and Cardinal Health,.

Diversification Opportunities for UnitedHealth Group and Cardinal Health,

-0.34

Correlation Coefficient

UnitedHealth Group  Cardinal Health,

Very good diversification

The 3 months correlation between UnitedHealth and Cardinal is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding UnitedHealth Group Incorporate and Cardinal Health, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health, and UnitedHealth Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UnitedHealth Group Incorporated are associated (or correlated) with Cardinal Health,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health, has no effect on the direction of UnitedHealth Group i.e., UnitedHealth Group and Cardinal Health, go up and down completely randomly.

Pair Corralation between UnitedHealth Group and Cardinal Health,

Assuming the 90 days trading horizon UnitedHealth Group is expected to generate 12.69 times less return on investment than Cardinal Health,. But when comparing it to its historical volatility, UnitedHealth Group Incorporated is 1.36 times less risky than Cardinal Health,. It trades about 0.03 of its potential returns per unit of risk. Cardinal Health, is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  63,682  in Cardinal Health, on October 25, 2024 and sell it today you would earn a total of  9,180  from holding Cardinal Health, or generate 14.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UnitedHealth Group Incorporate  vs.  Cardinal Health,

UnitedHealth Group

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days UnitedHealth Group Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, UnitedHealth Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Cardinal Health,

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Health, are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Cardinal Health, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UnitedHealth Group and Cardinal Health,

The main advantage of trading using opposite UnitedHealth Group and Cardinal Health, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UnitedHealth Group position performs unexpectedly, Cardinal Health, can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cardinal Health, will offset losses from the drop in Cardinal Health,'s long position.

The idea behind UnitedHealth Group Incorporated and Cardinal Health, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.